Telenor is selling its mobile units in four countries across Central and Eastern Europe (CEE) to investment firm PPF Group for €2.8 billion.
The sale – which is awaiting regulatory approvals - is part of a broader refocusing by the Norwegian group. PPF is acquiring Telenor Common Operation (the operator’s network and IT unit covering CEE) along with Telenor’s operations in Bulgaria, Hungary, Montenegro and Serbia.
As of Q4 2017, Telenor leads the market in Montenegro and holds second place in the other three markets by connections. Its CEE units accounted for 9% of Telenor Group’s total 2017 revenue.
PPF Group has an established footprint across CEE, including Nova Broadcasting Group in Bulgaria and O2 Czech Republic. The group’s head of telecoms Ladislav Bartonicek stated that the acquisition was a further bid to establish PPF as a mid-sized European operator.
The agreement comes after Telenor received an unsolicited offer for the units in January, with rumours implicating several companies as the interested party. The agreement was reached as the offer fit with Telenor’s stated goal to “simplify its business” as it looks to reduce costs and boost efficiency via streamlining assets and digitalisation.
Telenor CEO Sigve Brekke said: “With the sale of our CEE assets, we take an important step in simplifying and focusing Telenor’s portfolio on the regions where we see the strongest potential for value creation. Following this transaction, Telenor’s footprint will consist of integrated fixed and mobile operations in Scandinavia, and strong mobile positions in Asia.”
Telenor is aiming to have the transaction closed by Q3. PPF will make the majority of its payment upfront, then follow this with instalments adding up to €400 million over the next four years. Telenor is earmarking some of these funds for a shareholder dividend.